Price a London Ontario House High, Accept Less?
I hear this all the time from home sellers: “Let us List it High Because Someone Will Offer Us, Less”
That thinking may have worked years ago but in today’s real estate environment, homebuyers have a tremendous amount of information by just a few clicks of the mouse, today’s buyers know prices and if you list a house or condo for sale in London Ontario too high, it could really cost you!
I Want to List it High Because I Know Someone, Will Offer Less
When a home seller interviews a Realtor, it’s easy to get caught up in the excitement of choosing a sales price. If a seller can get more money for the home, it means more financial opportunities for them. Unfortunately, uninformed sellers often choose the Realtor who tells them they will list it at the highest list price or worse, the lowest commission. This is, by far, the worst mistakes a home seller can make.
The reality is that it doesn’t matter how much money a home seller thinks their home is worth. The only person whose opinion really matters is the buyer who is going to make an offer, and of course, the appraiser. Pricing a house is part science and part art. It involves comparing similar houses in similar neighbourhoods of London, making the necessary adjustments for the differences between them, charting market movements and measuring the amount of housing inventory, all of this in an attempt to help determine a range of value. This is the same method appraisers use to evaluates a house. No two appraisals are exactly the same; they are, however, generally close to one another. There is no hard and fast way to just stick a price on a home in London Ontario and area.
Is the Price Too Low?
Houses sell at a price a buyer is willing to pay and a seller is willing to take. If a house is priced too low the seller should expect to receive multiple offers and drive up the price up to the market value. There is not much danger in pricing a home under its actual value and your competition. The danger is in pricing a house or a condo too high and having the home sit on the market for weeks, even months.
How It Starts To Go Wrong
The home seller did not interview more than one Realtor. They may have picked the first Realtor off the Internet because they have a very low commission fee, or was recommended by a friend or a co-worker The first Realtor priced their house at $495,000. After 90 days of sitting on the market, the listing expired.
It Continues To Go Wrong
The next Realtor they hire goes and lists the house for $475,000. A few weeks pass and eventually, the price drops to $465,000 and still no offers. A few people looked at the house, but no serious buyers came forward.
The Home Owner is Now Tired & Exhausted
The home seller and the Realtor then price the home at $437,000 and sold very quickly. The sad part is that the comparable sales in the neighbourhood fully justified a price of $455,000, but the home had been on the market for too long at the wrong price, and now the market had slowed.
The question is how much money does an expired listing cost the homeowner? The financial losses often exceed the extra mortgage payments paid and goes beyond the cost or the hassle factor of trying to keep a home spotless during the listing period. It affects the value that a buyer ultimately chooses to pay because it is no longer a “fresh” listing. It’s now stale, dated, a home that was overpriced for too long.
Don’t let it happen to you. Don’t be that seller of an expired listing. Be sure to hire a professional Realtor to price your home correctly from the beginning.
Even with the London Ontario real estate market booming at the present time, the above still happens! Most houses and condos in London are selling for close to full price or more and within 1-2 weeks and yet, there are hundreds of properties that have been on the market for over 76 days!